As compared to the market clearing price, the total amount of consumer surplus and producer surplus is
A. the same as a government-imposed price floor that is higher than that market clearing price.
B. greater for a government-imposed price floor that is higher than that market clearing price.
C. greater for a government-imposed price ceiling that is lower than that market clearing price.
D. smaller for a government-imposed price ceiling that is lower than that market clearing price.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Refer to Table 9-11. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Denmark gain compared to the "without trade" numbers?
A) -150 B) 0 C) 150 D) 1,050
Supply will become more elastic when
A) a time period lengthens. B) the time period shortens. C) the good is important to consumers. D) there are good substitutes for the goods.
Which of the following is least accurate about labor and employment during the Great Depression?
a. New social security programs were established. b. The price level decreased. c. Average real wages decreased. d. Unemployment rates dropped throughout the course of the Great Depression.